What’s the New PSW Tax Credit?
Canada’s Budget 2025 proposes a temporary Personal Support Workers Tax Credit running from the 2026 to 2030 tax years, offering a refundable credit equal to 5 % of eligible earnings, up to $1,100 per year. This targets PSWs employed in health care establishments where wage support hasn’t already been boosted via bilateral agreements. (budget.canada.ca)
Who’s Eligible (and Who’s Not)
Eligible PSWs must meet all of the following:
- Provide one-on-one, essential care (activities of daily living, patient mobility, safety) under the direction of a regulated health professional or health organization. (budget.canada.ca)
- Work for a regulated health care establishment, such as hospitals, residential care, nursing homes, home care, etc. (budget.canada.ca)
- Be located in a province or territory without an existing bilateral agreement including wage-boosting funding for PSWs (e.g. BC, NL, NWT have agreements; PSWs in those provinces are excluded) (budget.canada.ca)
How Much You’ll Get — Examples
| Scenario | Annual Eligible Earnings | Credit Rate (5 %) | Maximum Credit Claimed |
|---|---|---|---|
| PSW earns $20,000 | $20,000 | 5 % | $1,000 |
| PSW earns $25,000 (in eligible province) | $25,000 | 5 % | $1,100 (cap) |
| PSW in province with wage-boost agreement | Any earnings | 0 % | $0 |
Credit is refundable, so even PSWs with little or no tax owing can receive money back. (budget.canada.ca)
When It Kicks In & How to Claim
- Applies to tax years 2026-2030. (budget.canada.ca)
- Must file a Canadian tax return for each year and report eligible income. Employers will need to certify earnings in prescribed form. (budget.canada.ca)
Actionable Tips for PSWs & Employers
- If you’re a PSW in an eligible province, track your eligible earnings from eligible work carefully. Keep supporting documents like employer certifications.
- Employers: become familiar with what constitutes “eligible health care establishment” so that your PSW team can claim correctly.
- If you’re moving provinces, check whether your new jurisdiction had a wage-boost agreement. It may affect eligibility.
- Plan ahead: since credit begins in 2026, think about organizing your records and expected income to maximize benefit.
Why This Matters
- PSWs often face modest wages despite essential work; this credit directly boosts take-home.
- Helps reduce caregiver shortage by offering financial recognition where support has lagged.
- Encourages federal and provincial governments toAddress long-standing discrepancies in support.
Bottom line: If you're a personal support worker in a province without wage-boost funding, expect up to $1,100/year back via this credit between 2026–2030. Keep solid records and tax filing in order to make the most.